Published on Thursday, March 7, 2024 | Updated on Thursday, March 7, 2024

China Economic Outlook. March 2024

We summarized the recent Chinese economic development as well as policy outlook in 2024. We also highlight the March 2024 "Two sessions".

Key points

  • Key points:
  • China’s 2023 GDP reached 5.2%, in line with our forecast and consensus, much higher than 3% in 2022 when the country was grappling with the pandemic. But considering base effect, 2022-23 two-year average GDP dipped to 4.1%, off the pre-pandemic track of “higher-than-6%”.
  • The recent economic bottoms-out are supported by (i) consumption (service sector recovery), (ii) industrial production (policy priority of high-end manufacturing and green transformation), (iii) infrastructure investment backed by the extra RMB 1 trillion government bond issuance and (iv) the exports resilience.
  • Risks in 2024 focus on real estate market, local government debt, deflation, dropping FDI/portfolio inflows and geopolitics, but we think the systemic financial risks do not exist at the current stage, given the prudent monetary policy and a series of precautionary financial regulation measures.
  • China-US confrontations have achieved some marginal improvement recently amid the high-level China-US communications, chief among them is Xi-Biden talk in the APAC meeting, etc., but the newly elected Taiwan’s president and this year’s US president election provides uncertainties for China-US relations.
  • Monetary and fiscal policy remains expansionary in 2024 to support recovery. We anticipate the government will announce the 2024 GDP growth target to “around 5%”. In addition, it will also promulgate China’s 2024 inflation target, monetary target, emission target as well as a series of monetary and fiscal stimulus in 2024.

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